Tatham v R.

For confiscation arising from fraudulent evasion of tobacco duty, participation in a joint enterprise does not itself establish a recoverable benefit. Under the former confiscation regime, the defendant must have evaded a duty liability to which he was personally subject.

Under Tobacco Products Regulations 2001, personal liability may arise where a person caused tobacco to reach the excise-duty point and retained a sufficient connection with it, or where that person was a holder with constructive control. A financially interested organiser and downstream distributor may satisfy either basis. A minor contributor paid only a fixed fee may not obtain the benefit represented by unpaid duty.

Tatham v R. concerned a late appeal against a confiscation order made after the appellant pleaded guilty to being knowingly concerned in the fraudulent evasion of duty on imported tobacco, contrary to section 170(2) of the Customs & Excise Management Act 1979.

The Crown Court at Nottingham sentenced him to 45 months’ imprisonment and made an order for £88,873.81 under section 71 of the Criminal Justice Act 1988. The proceedings had wrongly proceeded on the former excise-goods regulations. The applicable regime was instead the Tobacco Products Regulations 2001.

The issue was whether the established facts nevertheless showed that the appellant was personally liable for excise duty, either because he caused the tobacco to reach the excise-duty point or because he held it constructively, so that the confiscation order could lawfully stand.

1. Appeal dismissed. The incorrect reliance on the 1992 regulations did not require the confiscation order to be quashed. If the facts established liability under the applicable regulations, the order could stand on that lawful basis.

2. Following R v May [2008] UKHL 28, a person convicted of a tobacco-duty offence obtains a pecuniary advantage only where that person evades a duty liability to which he or she is personally subject. Participation in a conspiracy does not by itself make every conspirator liable for all unpaid duty.

3. Under Regulation 13(3)(e) of the Tobacco Products Regulations 2001, whether a person caused goods to reach the excise-duty point is a factual question. Causation must not be too remote and the person must retain a connection with the goods when, or after, duty becomes payable. The appellant had invested in the enterprise, was financially interested in the imported tobacco and acted as the organiser’s deputy in its United Kingdom distribution. He therefore caused the goods to reach the excise-duty point and remained connected with them. He was jointly liable for the duty.

4. Alternatively, Regulation 13(1) was satisfied. Holding does not require physical possession or beneficial ownership. It includes constructive possession where a person can exercise legal or factual control, directly or through an agent, with the necessary knowledge. The appellant’s role in receiving incoming loads, moving equipment for palletised stock, and acting as an implied consignee of the road-carried cargo established such control.

5. The court rejected the suggestion that the appellant was merely a paid courier. There was no evidence of a fixed fee. The proper inference was that he expected remuneration through the tobacco trade and so had a beneficial interest. The seizure of the tobacco did not reduce the pecuniary advantage represented by the duty liability.

6. The appellant did not pursue an objection under Article 1 of Protocol 1 to the European Convention on Human Rights. In any event, the order was proportionate: it was directed to denying benefit and was substantially below both his allocated share of the evaded duty and the total revenue loss.

• Court of Appeal (Criminal Division): Granted leave to appeal out of time and dismissed the appeal, upholding the confiscation order on the basis of personal liability under the applicable regulations: [2014] EWCA Crim 226.

• Crown Court at Nottingham: The appellant pleaded guilty to the tobacco-duty offence on 5 February 2004. On 26 January 2005, he received 45 months’ imprisonment and a confiscation order of £88,873.81 under section 71 of the Criminal Justice Act 1988.